Changing The Economics of Growth

[Webster]

(The Guardian) Perhaps we are doing this whole development thing wrong. In an interview with The New York Times Magazine, Herman Daly, a lauded economist who was once a senior figure at the World Bank and is now a emeritus professor at the University of Maryland School of Public Policy, argues that modern economics’ obsession with growth is misguided, due in part to the damage done to the planet.

Economic growth is considered a major barometer of a country’s health, both for wealthy nations and the developing world. In the interview, Daly argues that we are viewing growth incorrectly, and that it’s implausible all nations can continue expanding their GDP endlessly. From the interview, here’s an encapsulation of his argument: It’s a false assumption to say that growth is increasing the standard of living in the present world because we measure growth as growth in G.D.P. If it goes up, does that mean we’re increasing standard of living? We’ve said that it does, but we’ve left out all the costs of increasing G.D.P. We really don’t know that the standard is going up. If you subtract for the deaths and injuries caused by automobile accidents, chemical pollution, wildfires and many other costs induced by excessive growth, it’s not clear at all. Now what I just said is most true for richer countries. Certainly for some other country that’s struggling for subsistence then, by all means, G.D.P. growth increases welfare. They need economic growth. That means that the wealthy part of the world has to make ecological room for the poor to catch up to an acceptable standard of living. That means cutting back on per capita consumption, that we don’t hog all the resources for trivial consumption.

The article only briefly gets into what Daly would propose to change the growth paradigm across the world, and indeed, his ideas would be a tough lift for many countries: Daly’s policy prescriptions for how this would happen include, among many ideas, establishing minimum and maximum income limits, setting caps for natural-resource use and, controversially, stabilizing the population by working to ensure that births plus immigration equals deaths plus emigration.
-Read more: https://www.nytimes.com/interactive/2022/07/18/magazine/herman-daly-interview.html